When an economist talks these days about barter models and equilibrium you know immediately that he is not right in his head. This is the actual state of economics: provably false
• profit theory, for 200+ years,
• Walrasian microfoundations (including equilibrium), for 150+ years,
• Keynesian macrofoundations (including I=S/IS-LM), for 80+ years.
So, the only interesting question for every economist is how to get out of the self-created proto-scientific black hole. Obviously, economists have done a bad job. More specifically, both orthodox and heterodox economists have messed up science because they were too much occupied with political agenda pushing.
Imagine, 150 years ago some physicists and engineers were given the task to build a machine that can fly. But instead of figuring out the laws of aerodynamics and thermodynamics and finding suitable materials, they discuss whether it is better to fly eastwards or westwards and whether tomato juice or coffee should be served during the flight. No question, these folks would not have gotten anything off the ground to this day.
Just the same with economists. They have not figured out the laws that govern the monetary economy but they had a lot to say about political issues like liberty, democracy, capitalism, and communism. To this day, they have no clue how the price- and profit mechanism works. The major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism ― are mutually contradictory, axiomatically false, materially/formally inconsistent and all got the foundational economic concept profit wrong.
And Steve Keen is still debunking barter and equilibrium models ― how sick is this?#1
Note that politics and science are spheres that run on entirely different principles and have therefore to be kept strictly apart. Political issues are discussed in the political sphere and are ultimately decided by the legitimate sovereign. The economist qua scientist has not more to say in the political sphere than any other citizen. All the more so, as he has not done is scientific homework and figured out how the economy works. To this day, economic policy guidance has NO sound scientific foundations but is plucked out of the thin air of political populism.
What is called political economics is a flagrant abuse of the prestige and authority of science for agenda pushing. Make no mistake, anybody is entitled to push any agenda. But to push a political agenda in the bluff package of science is the worst fraud of all.
You ask: “What do you think of Sweden’s failure of privatising schools. It seems that Milton Friedman hadn’t factored into his theories that schools would cheat, or that policing privatized schools would make them two to three times more expensive.”
I think that this is alone the business of the Swedish people to discuss and to decide. And if the Swedish people are smart the last thing they would do is to follow incompetent scientists and brain-dead agenda pushers like Milton Friedman.#2
Needless to emphasize that Steve Keen and you have also to be counted among the trolls.
#1 Economics: communication without content
#2 For details of the big picture see cross-references Failed/Fake Scientists
Related 'How to spot economics trolls'.
ICYMI on Feb 26
- Where advanced Heterodoxy — represented by Steve Keen — took the wrong turn
- Keenonomics, aggregate demand/change of debt, and some misleading critique
- Throw them out! Orthodox and heterodox economists are unfit for science
You say “So you’re saying, Egmont, that your economic system would also work in socialist economies where the government supplies the health care and the National Insurance schemes.”
No, I am saying that Steve Keen’s approach is faulty and therefore NO alternative to orthodox economics. The essential point is that Steve Keen’s profit theory is false. See Debunking Squared.
It should be obvious that an economist who does not know the Profit Law is a laughing stock just like somebody who calls himself an engineer and does not know the Law of the Lever.
Steve Keen is busy with “Debunking Mainstream economics: equilibrium barter models for a far-from-equilibrium monetary economy.”
Mainstream economics needs NO repetitive debunking. It is dead for 150+ years and everyone with two brain cells got it by now. The point is to move on: “The moral of the story is simply this: it takes a new theory, and not just the destructive exposure of assumptions or the collection of new facts, to beat an old theory.” (Blaug)
Heterodoxy in general, and Steve Keen, in particular, have failed on this score.#1, #2
#1 The stupidity of Heterodoxy is the life insurance of Orthodoxy
#2 Economics: communication without content